RIM Must Fix Glitches, Boost Satisfaction To Hold Off iPhone

January 5, 2009

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While Research In Motion (RIM) and Apple continue to dominate the consumer smartphone market, market-share leader RIM must improve customer satisfaction and fix glitches with its new BlackBerry Storm in order to defend itself against long-term challenges from Apple’s iPhone, according to the latest ChangeWave Research survey.

The survey of 3,803 cell phone owners takes a close look at smartphone market trends, including consumer reaction to RIM’s launch of the BlackBerry Storm and how it compares with the Apple iPhone. The December 9-15, 2008 survey was conducted shortly after the Storm’s initial release.

Smartphone Market Demand

The overall growth rate for the smartphone market has contracted since the previous survey, but it is still positive despite the recessionary climate, Changewave said. A total of 12.2% of respondents plan on buying a smart phone over the next 90 days, 0.3% more than previously.

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Current Market Share

While RIM (41%) is still the consumer market-share leader, it has fallen one point since Changewave’s? previous survey in September. It is now at its lowest percentage in the last 12 months.

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At the same time, Apple (23%) has witnessed explosive growth – up 6 points? since September. Apple’s overall market share has more than doubled in the past six months – a direct result of the July release of the popular 3G iPhone.

Taken together, Apple and RIM now control two-thirds of the smart phone market, as smaller/weaker players such as Palm (9%) have proven unable to compete.

Winners and Losers in the Next 90 Days

The picture going forward points to changes in the smartphone market, according to ChangeWave.? RIM (39%; up nine points) shows? momentum because of its slew of new product launches – such as the Storm, Bold and Pearl Flip – and appears capable of giving Apple a run for its money in the first quarter of 2009.

Moreover, after the huge wave of enthusiasm generated by the 3G iPhone launch, Apple consumer planned buying (30%; down 4-points) appears to have settled down.

Customer Satisfaction: BlackBerry Storm vs. The iPhone

The survey also took a close-up look at the reaction of 61 owners of the new BlackBerry Storm, and compared the results with a similar survey in July 2007 of new owners of the original iPhone.

The overall satisfaction rating given by new owners of the Blackberry Storm can, at best, be characterized as lukewarm, the research found. One in three Storm owners (33%) said they were “very satisfied” with their new model, well below the 52% very satisfied rating given by all current owners of BlackBerry smartphones.

Changewave said that the satisfaction rating for the Storm is similar to that of mid-tier smartphone manufacturers such as Nokia (32%), Motorola (32%), HTC (31%) and Samsung (30%). While fit is not bad, the company said,? it is mediocre. This points to a potential concern regarding RIM’s head-to-head battle with Apple.

In contrast, the original iPhone’s very satisfied rating (77%) was more than double that of the new BlackBerry Storm (33%), and the Storm’s “unsatisfied” rating (14%) is three times higher than that of the original iPhone (5%).

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Moreover, 4% of new buyers report they’ve already returned/exchanged their Storm, or are very likely to return it. Another 7% say they’re somewhat likely to return or exchange it.

BlackBerry Storm: Key Likes and Dislikes

The survey also asked respondents to rate what they liked best and disliked most about the Storm. The results showthat the touch screen is a highly popular option. One-in-two (49%) say “touch-screen interface” is what they like best about their BlackBerry Storm. Other key likes include screen size (46%) and screen resolution (43%).

At the same time, the touch screen interface represents one of the BlackBerry Storm model’s biggest problems. Regarding dislikes, Lack of a QWERTY Keyboard (21%), touch screen interface (20%) and difficult to use (20%) were top issues, along with short battery life (21%).

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